Amid more challenging economic conditions, six out of 10 small and medium business owners (SMEs) say they plan to invest to grow their business in the next 12 months, new insights from NAB reveal*.
People, new products, and technology topped the investment list with SMEs in Queensland, Victoria, and Tasmania most likely to invest to grow in the next year.
NAB Executive for Small Business Krissie Jones said the research highlighted Australia's dual-speed economy, where many businesses continue to make considered investments to grow, while others look to manage through higher costs and constrained consumer spending.
"What has struck me as I've been travelling around Australia is the resilience of small business owners - they are adapting, with many looking to invest and preparing for growth," Ms Jones said.
"Many remain eager to explore growth opportunities that are right for them, while being more thoughtful around where and how they spend their money in the near term."
By industry, three in four SMEs in the finance and insurance sectors planned to invest, followed by SMEs in property services and business services (two in three). Intent to invest was lowest in retail and construction, industries that have faced greater challenges over the past 12 months.
The research also shows small business owners in Queensland were most likely to invest in new equipment (around one in three), especially in the hospitality sector (almost one in two).
"With higher interest rates and stubborn inflation, what we're seeing is SMEs making smart investments in goods that help reduce their operating costs – important in the current environment," Ms Jones said.
"We've continued to see strong growth in business finance for new equipment, with NAB's equipment finance to small businesses up 11% on the June quarter.
"Some of the top things being financed include Utes, vans, trailers, and machinery.
"As Australia's largest business bank, our focus remains on supporting all our customers - those ready to grow or needing extra help."
Owners of Melbourne Arancini Paul and Laura Muscara have been supplying stockists with fresh handcrafted authentic Arancini for over eight years and have seen demand steadily increase over the past 24 months.
To keep up with increasing demand, and to reduce operating costs, the team have recently invested in a new automated, one of a kind Arancini assembly machine, which has been designed, engineered and built locally in Melbourne.
"Our new assembly line will completely modernise our existing manufacturing process which is currently being done manually," Mrs Muscara said.
"Today, we manually produce around 700 arancini per hour. Our new modern equipment will increase this to 2,500 per hour helping us to not only reduce costs, but also future proof the business by ensuring we can keep up with growing customer demand."
Notes:
*Insights drawn from responses from 700 Australian small business owners.
Click here to read the full SME research report.
